Apple’s new iPad Mini is pricier than at least one analyst was originally anticipating.

At an event this afternoon, Apple said the new device will start at $329 for a model with 16 gigabytes of memory. That’s higher than similar smaller tablets from Google and Amazon.com Inc. that are currently priced at $199.

Bill Kreher, senior technology analyst at financial services firm Edward Jones, said he was expecting Apple to unveil a device priced at $299. The higher price point caught some investors by surprise, he says, and likely contributed to why the stock sell-off accelerated in afternoon trading.

“Some investors had hoped Apple would step on the throats of Amazon and Google with its pricing,” Kreher told MarketBeat. “But it looks like Apple will rely more on its brand power and try to maintain margins in what is an increasingly price-sensitive environment.”

Shares recently fell 1.4% to $625.01, after earlier falling as low as $615.91. Kreher said the knee-jerk negative reaction to the new products creates a buying opportunity for investors.

“Apple has always prided itself on premium pricing,” Kreher says. “It appears they are not moving from that strategy.”

Abhey Lamba, an analyst at Mizuho Securities, also questioned the iPad mini pricing. Lamba suggested the $329 starting price point has left room for competitors to deliver alternatives.

“While the announcement was largely in-line with expectations, two items likely disappointed investors,” Lamba wrote in a research note. “One, the iPad mini’s price-point leaves significant room for competition to establish an alternate eco-system in the tablet space and secondly, iPad shipments for the fiscal fourth quarter were likely below expectations by about two million.”

Apple shares have struggled in recent weeks after hitting record highs above $700 in September. The stock hit correction territory earlier this month, considered a decline of at least 10% from peak to trough.

Still, shares are up more than 50% this year. The vast majority of analysts remain bullish on the company, which is poised to report earnings on Thursday after the closing bell.

“Once the stock hit full correction territory, we began recommending investors to get more aggressive,” Edward Jones’ Kreher says. “Today’s decline presents an attractive entry point.”

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Comments (5 of 31)

To iPadDoc:
I slightly disagree . As a consumer, I want it as cheap as possible, but I also don't want junks. To me, every penny spend on junks are wasted bad investment . I am still using my 2004 40gb 4th gen. iPod to this day, to its full capacity, to me that's good investment .

Are you a mobile phone app developer? Since you "want" to own so many different platform devices, you seems like one to me. But no matter what, you still know to buy the "good" stuffs for yourself, so you DO know the difference among values and you are a value investors. :-D.

The screen of the iPad Mini is 7.9 inches on the diagonal, making it larger than the 7-inch screens of the competitors. It also sports two cameras, on the front and on the back, which the competitors don't.
To me, that's a great deal if I have to pay additional $30. But that just me.

Also, has anybody think about and compared those products resale value? I don't know about android phones /"pad"s and the likes, I can assume not so much for them. when I can sell my two year old iPhone 4 for more than $200, use the cost I recapped to paid for a new iPhone 5, now that's beautiful and what I call good "investment ". Just for that. It worths the extra $$.

8:26 pm October 23, 2012

St Fual wrote :

They killed the iPad 3 a product which was a stopgap to keep sales until it got the CPU it actually needed. While many manufacturers do early releases to keep the competition out, will the media at least acknowledge that the product that some of us said was weak in technical specifications, had a point.. Criticism of Apple is not always blasphemy sometimes its the truth.

5:38 pm October 23, 2012

John wrote :

Apple user keep sucking up any overpriced apple product. They should have priced it at 499 and buyer would have been even more pleased. EXCLUSIVE!!!

5:37 pm October 23, 2012

JC Cali wrote :

So Many New Tablets This Week -- Another tabletmaker also introduced a series of new Android tablets with some impressive features -- one is called the Novo 7 Flame - priced at $189 at a site called TabletSprint - a 7 Inch tablet that gives the $249 Nexus 7 & the new $330 Mini iPad some competition-- the Novo 7 Flame has 16GB, Android 4.1 O/S, a high resolution 1280x800 screen, Micro-SD portable storage, HDMI to view movies and media downloads on a TV in HD, Two Cameras - inclhding a 5 MegaPixel camera with AF & Flash, and a 2 MegaPixel Webcam; plus Bluetooth, Ethernet, WiFi and an option for 3G... made by Ainol Electronics - an Award Winner for "Best Tablet of the Year" at CNET/Consumer Electronics Show 2012 -- They're also launching two new 10-Inch tablets with high resolution screens -- one has a Dual Core processor with a 1280x800 screen for $220; and a powerful Quad Core with a 1920x1200 Liquid Crystal display (like Apple's Retina screen) for around $260 -- one of the first sites to offer these new models in the U.S. is called TabletSprint --

5:32 pm October 23, 2012

iPadDoc wrote :

In response to anonymous, I am a serious AAPL investor (20K shares) and I am disappointed in the pricing. It should have been $299 for the 16 Gb and they should have offered an 8 Gb at $249. Their current pricing abandons the low end of the market to Samsung and Amazon.

BTW, the article uis wrong about comparable products. The comparble prioducts are the Nexus 16Gb and the Galaxy Tab 16 Gb, both at approxiamtely $249 (the Tab price is coming down). That's why the $299 price point would have been better.

I personally own and use all of these (Nexus, Tab, and all iPad's) and gifted dozens of these to friends and relatives. I'll buy the new minin and "4th generation for myself", but even as an Apple fan and investor, it the price point makes me still favor the 7" androids for gifts.

I'm still hopeful that Apple will see the light and have an out of character sale on these (cyber Monday) for $299.

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